Only 34% of Americans Have Planned Their Income Beyond Age 80. A $1 Million 401(k) Could Still Leave a Retiree Guessing About the Final 15 Years

Most people have some idea of how they’ll pay their bills in their 60s. Far fewer have thought about what happens if they live another 20 or 30 years.

A Guardian Life survey of 2,082 U.S. adults found that 48% have planned for income in their 60s, but just 34% have considered how they’ll support themselves at 80 and beyond. Among adults ages 45 to 70, that last figure drops to 28%.

Now picture a hypothetical 65-year-old with $1 million in a 401(k). A $50,000 first-year withdrawal amounts to 5% of the balance, and the money may seem sufficient for a comfortable retirement. But what happens when that same account still needs to pay the bills at 85, 90 or even 95?

A $1 Million Balance Comes With No Built-In Paycheck

Two risks drain a 401(k). Longevity risk means living longer than the money lasts. Sequence-of-returns risk means bad markets arrive early, when withdrawals turn temporary losses into permanent ones.

Inflation makes both worse. If the $50,000 withdrawal grows 3% a year to keep its buying power, it reaches about $105,000 by age 90.

Prices for older Americans have been rising faster than 3%. The Bureau of Labor Statistics’ research inflation index for adults 62 and older climbed about 3.6% over the 12 months through September 2026.

The table shows how much remains at ages 85, 90 and 95, before that year’s withdrawal, assuming the retiree starts with $50,000 and increases the amount by 3% annually:

Even steady returns don’t guarantee that a 5% starting withdrawal will last 30 years. At 6%, the account runs dry at about 94. At 4%, the money is gone by 87. The unpredictability of the markets makes the outcome even less certain.

One Bad First Year Moves the Finish Line

Now give the retiree a 20% market loss in the first year. After the initial $50,000 withdrawal and the decline, the balance falls to $760,000.

Even if investments earn 6% every year afterward, the money runs out at about 84. Move that same 20% loss to the 11th year, with 6% returns in every other year, and the account lasts until about 88. The returns are identical. Only their timing changes.

That’s the danger of poor returns early in retirement, when withdrawals leave less money available for a recovery. We covered how to defend them in a free guide on the first five years of retirement.

Taxes and Medicare Climb as Withdrawals Grow

Withdrawals from a traditional, pretax 401(k) count as ordinary income. For a single retiree, combined income above $34,000 can make up to 85% of Social Security benefits taxable. If this saver also receives the average 2026 retired-worker benefit of $2,071 a month, the $50,000 withdrawal would put them above that line.

As withdrawals grow, they can push the retiree toward Medicare’s income-related surcharges, known as IRMAA. In 2026, these begin when a single filer’s modified adjusted gross income exceeds $109,000. The first tier raises the monthly Part B premium from $202.90 to $284.10 and adds $14.50 for Part D. Taxable Social Security benefits and other income also count toward that limit.

Medicare sets premiums using tax returns from two years prior, so a big withdrawal at 85 shows up in your premiums at 87.

Required minimum distributions (RMDs) add another consideration. For someone who’s 65 today, they generally begin at 75. From then on, the IRS requires a minimum annual withdrawal based on age and account balance, although the retiree can take more.

Social Security adds another uncertainty. The 2026 Trustees Report projects that the retirement and survivors trust fund will run out of reserves in 2032, when continuing income would cover about 78% of scheduled benefits unless the law changes. That could leave this retiree more dependent on the 401(k).

Three Moves That Put Ages 80 to 95 on Paper

1. Split essential spending from flexible spending. Look at how much of your necessities, including housing, food and insurance, can be covered by predictable income from Social Security, a pension or an annuity. In Guardian’s survey, 64% of adults said guaranteed income would make them more confident about retirement. Delaying Social Security can raise your inflation-adjusted monthly benefit for life, although it means giving up earlier checks.
2. Use the years before RMDs start for Roth conversions. Converting pretax savings now can shrink future required withdrawals, but each conversion adds to taxable income. In 2026, the 22% federal bracket for single filers ends at $105,700 of taxable income, while Medicare’s first surcharge begins above $109,000 of modified adjusted gross income (MAGI). Those are different measures, so plan conversions around both tax brackets and future Medicare costs.
3. Stress test your plan to 95 with a bad first year. Rerun your own numbers with a 20% loss in year one and inflation near 4%. If the money runs out before 90, consider a lower starting withdrawal. Keeping some near-term spending money in cash or short-term Treasuries can also reduce the chance of having to sell stocks during a downturn.

A $1 million 401(k) can last to 95. Whether it does depends on withdrawals, market returns and taxes. You can’t control the markets, but you can make decisions about the other two.

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